World oil prices dropped sharply today, hit by bigger-than-expected rises in US crude stockpiles, amid forecasts of falling global demand for energy, analysts said.
New York's main contract, light sweet crude for delivery in May, fell $1.16 to $50.70 a barrel in early deals. In London, the price of Brent North Sea crude oil for delivery in May lost $1.06 to $50.80 a barrel.
New York prices have slumped by 13% since supply worries pushed them to historic high points of $58.28 on April 4, the same day Brent crude rocketed to a record level $57.65.
US stocks of crude oil and petrol grew strongly over the past week, according to today's US government data - easing fears about a pre-summer supply crunch.
The US Department of Energy said crude stockpiles for the week ending April 8 had risen 3.6 million barrels to 320.7 million barrels, against a rise of just 500,000 barrels expected by Wall Street. The private-sector American Petroleum Industry reported an even higher rise of 4.04 million barrels to 325.34 million.
The DoE also reported petrol stockpiles had risen 800,000 barrels to 213.1 million in the week, against market expectations for a small rise of 100,000 barrels.
The figures came after the International Energy Agency earlier this week suggested that oil prices may have reached a peak, leaving traders looking for an opportunity to sell.
Weighing also on prices was an expectation of an output hike from OPEC. OPEC president Sheikh Ahmed Fahd al-Sabah on Monday said he believed the cartel would go ahead with its proposed output increase of 500,000 barrels per day (bpd) next month, despite the drop in prices.
Any increase by the Organisation of Petroleum Exporting Countries would come against the backdrop of falling demand.
